Bookkeeper who stole $53M gets nearly 20 years

DON BABWIN
Associated PressPublished: February 14, 2013 2:31PM

ROCKFORD, Ill. (AP) -- A former city bookkeeper was sentenced to nearly 20 years in prison Thursday for embezzling more than $53 million from her Illinois community, in what ranks as one of the worst abuses of public trust in the state's corruption-rich history.

Rita Crundwell, who pleaded guilty to wire fraud for embezzling money from the city of Dixon from 1991 until her arrest last April, tearfully apologized in a Rockford federal courtroom before U.S. District Judge Philip Reinhard sentenced her to 19 years and 7 months in federal prison -- just shy of the maximum 20 years. She was taken into custody at the end of the hearing.

"I am truly sorry to the city of Dixon, to my family and my friends," Crundwell said in court, sobbing.

For more than two decades as comptroller for Dixon, a northern Illinois community best known for being the site of Ronald Reagan's boyhood home, Crundwell siphoned city funds to pay for properties, vacations, luxury cars and a horse-breeding operation that became nationally renown.

Crundwell's apology marked the first time she spoke publicly about her massive theft, and before she got her turn in court, she had to listen to people testify about the damage she had done.

Before sentencing her, Reinhard told Crundwell that she had crippled the largely working-class city of roughly 16,000 residents.

"You showed a much greater passion for the welfare of your horses than you did for the people of Dixon who you represented," the judge said.

He said his sentence means the 60-year-old Crundwell will likely remain locked up until she is 77.

Crundwell still faces 60 separate but related state felony charges for theft in Lee County. She has pleaded not guilty to those charges.

Crundwell got away with her scheme for so long because for years, she had sole control of the city's finances and would hide her theft behind fictitious invoices for things such as municipal sewer projects. All the while, she was spending the city's money on her prize-winning horses, expensive jewelry, luxury cars and birthday bashes in Florida.

Prosecutors say Crundwell began depositing Dixon's money in a secret bank account in January 1991 and continued doing so until her arrest in April 2012, months after the FBI began monitoring her transactions. Her scheme began to unravel when she sent on an extended vacation in 2011 and the person filling in for her stumbled upon her secret account, prompting the mayor's call to the FBI.

Assistant U.S. Attorney Jim Pedersen said after the hearing that Crundwell would have continued stealing if she hadn't been caught.

"There was no evidence she was going to stop," he said.

Crundwell's public defender had requested a sentence of about 13 years, which would have been on the lower end of the sentencing guidelines. But prosecutors sought closer to the maximum sentence of 20 years in prison and an up to $250,000 fine.

The judge also ordered Crundwell to pay full restitution -- $53.7 million -- as per the terms of her deal, but prosecutors said they only expect to recover about $10 million of that. Over the past several months, U.S. Marshals have been auctioning off Crundwell's assets, including houses, horses and jewelry.

Crundwell began working for the city about 100 miles west of Chicago when she was 17 and began overseeing its finances in the 1980s. Prosecutors say residents, many of whom who work in factories and on grain farms, came to trust her.

Besides the luxury homes and vehicles she bought over the years, Crundwell spent millions on her horse-breeding operation, RC Quarter Horses LLC, which produced 52 world champions in exhibitions run by the American Quarter Horse Association.